Watercrest Pursues JV with St. Joe, Continues Southeast Expansion

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While it has just seven properties up and running today, Watercrest Senior Living Group has its sights set on a loftier goal: to become a sizable regional player in the Southeast.

The senior living company headquartered in Vero Beach, Florida plans to open between four and six new properties a year in states that include Florida, Georgia and South Carolina. Currently, Watercrest has six new projects under construction and seven more in development — a quickening pace, especially for a company that owned and operated just three communities less than two years ago. The portfolio could ultimately hit 35 or 40 properties, according to Watercrest CEO and Principal Marc Vorkapich.

“We’re really moving now,” Vorkapich told Senior Housing News. “The Southeast of the U.S. is really the focus for us.”

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The growth is coming, in part, through a recently announced joint venture with real estate developer and manager the St. Joe Company (NYSE: JOE). The two organizations have pledged to jointly build and own a 107-unit assisted living and memory care community in Santa Rosa Beach, Florida. While the details are still being hammered out, the community would likely arrive with multiple dining venues, a pool, spa, wellness programming with aquatic therapy and health education.

The announcement marks Watercrest’s first entry into northwest Florida, and represents a growing interest in the senior housing industry from St. Joe. Last year, St. Joe teamed up with Margaritaville Holdings and Minto Communities USA to pursue the development of a third Latitude Margaritaville active adult community in Bay County, Florida.

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While St. Joe didn’t elaborate on its overall plans when reached by SHN, the announcement with Watercrest provides more evidence that the company is taking a closer look at investing in more traditional senior living properties. St. Joe owns land primarily concentrated in Northwest Florida and has large residential and commercial land-use entitlements in hand or in process. The company also owns various commercial, resort, and club properties. As of 2017, St. Joe owned 177,000 acres land in Florida with significant entitlements, according to its annual report that year.

The arrangement between Watercrest and St. Joe — both of which are based in Florida — was a long time coming. Specifically, it was Mark Chilcott, Watercrest’s vice president of development, whose relationships proved crucial, Vorkapich said.

“[St. Joe owns] quite a bit and they have such a tremendous vision for what that area can be,” he explained. “So, we started talking and getting to know each other. Breaking bread and sharing visions and ideas of what Watercrest is about, what they’re about, and from those conversations over a great period of time we got on the same page.”

Construction of the new Watercrest and St. Joe community is expected to begin later this year, with doors expected to open to new residents by the end of 2020.

Growth philosophy

The collaboration with St. Joe exemplifies the sort of luxury-style product that Watercrest has in mind as it collaborates with partners such as United Properties, Providence One Partners, WayPoint Residential and Titan Development.

Watercrest’s properties range in unit count, but they typically come with designs and services suitable for a range of older adults. That includes the company’s “market plaza” sensory areas complete with a faux-outdoor streetscape that has a newsstand, art gallery, bakery, salon, spa and post office.

While the company aims to attract residents with higher-end amenities and services, it’s not usually the price leader in the markets it serves, Vorkapich said. That’s partly because the company can do everything in-house, from development to operations to marketing.

“It helps us to lower the cost of our projects because we are repeating them with many of the same partners,” Vorkapich said. “We kind of cut our teeth on the fact that we wanted to deliver a much higher-quality product for the rates that are in the market.”

Any growing senior living company needs quality workers. To that end, Watercrest is able to offer its caregivers some job perks that might help give it a leg up over competitors, such as a decent pay rate, benefits packages, a new 401(k) match program and multiple avenues for training and career development. For example, Watercrest added to its main office a space that can hold about 60 employees for large training sessions.

The company also adopts a servant leadership management model, meaning that frontline workers are valued more than anyone else in the company.

“The person closest to the customer is absolutely the most important person we focus on,” Vorkapich said. “And we make decisions that way.”

On the tech adoption side, Watercrest is more cautious, but only because it’s not as easy for a company its size to spend vast sums of money testing new products and processes that may or may not work.

But that doesn’t mean Watercrest doesn’t have some grand ideas regarding tech. Two concepts the company is researching include circadian rhythm lighting and more integration of artificial intelligence.

Last October, Watercrest made a key hire in former Senior Lifestyle Corporation employee Hollie Kemp, a memory care expert previously recognized by industry association Argentum for her work using a sensory stimulation program based on aromatherapy principles to help residents living with Alzheimer’s or dementia.

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